Chile economy: Consumer prices fall in November

Event

The consumer price index fell by 0.5% in November, the steepest monthly fall in local prices since August 2009. This yielded cumulative inflation of only 1.5% in the first 11 months of 2012 and 2.2% in the 12 months to November.

Analysis

The trend in the headline rate comes as a relief after higher-than-expected inflation readings in September and October. November’s deflation was wholly explained by a 0.9% fall in the prices of tradeable products. This reduced cumulative inflation in tradeables to 0.2% in the first 11 months of 2012 and 0.4% in the 12 months to November. Transport costs fell by 1.6% in November thanks to lower fuel prices, which also helped to cut electricity tariffs by 7.2%. The prices of food and non-alcoholic beverages fell by 0.7%, and included a moderation in the prices of important food items such as potatoes (down 15.8% in November but still 55.6% up since the beginning of the year) and tomatoes (down 6.8%, for a cumulative rise of 31.6% ).

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